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Kristinn Ingvarsson / AP
Former Prime Minister of Iceland Geir Haarde, center, is accused of negligence for failing to prevent the financial implosion from which the small island country is still struggling to recover.
REYKJAVIK, Iceland -- Iceland's former prime minister went on trial Monday as the first world leader to face criminal charges over the 2008 financial crisis that affected much of the world economy.
Geir Haarde became a symbol of the bubble economy for Icelanders who lost their jobs and homes after the country's main commercial bank collapsed in 2008, sending its currency into a nosedive and inflation soaring.
Prosecutors opened the case at the Landsdomur, a special court being convened for the first time in Iceland's history. The trial is expected to last until mid-March, with the court taking another four to six weeks to deliver its verdict.
Haarde is accused of negligence for failing to prevent the financial implosion from which the small island country is still struggling to recover.
The former prime minister has rejected the charges, calling them "political persecution."
In the financial crisis's immediate aftermath, as unemployment and inflation skyrocketed, many sought to affix blame for the havoc across the 330,000-strong nation. A wave of public protests forced Haarde out of government in 2009.
Former British Prime Minister Gordon Brown described Haarde's behavior after the collapse of Icesave, which was owned by bank Lansbanki, as "unacceptable" and "illegal" at the time, according to IceNews, a news website covering Iceland, Scandinavia and Northern Europe.
U.K. savers lost millions of pounds when three of Iceland's banks failed.
IceNews reported that during his first morning in the witness stand, Haarde said it was now clear that the banks were under-capitalized, a fact which they covered up. The government had no way of knowing the truth, especially given that international auditors boosted the banks' claims, he said, according to IceNews.
Haarde pleaded not guilty and has sought to have all charges dismissed, calling the proceedings "preposterous."
He has insisted Icelanders' interests were his "guiding light" and blamed the banks for the crisis, saying government officials and regulatory authorities tried their best to prevent the crisis and that his "conscience is clear."
A last ditch attempt by Haarde's independence party to have the charges dropped was rejected last week in Parliament.
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The Associated Press and msnbc.com staff contributed to this report.
Leave a Comment:
Hmmm, is a PM the same thing as pres. Can we bush next.
Another dreamer who wants the govt. to be the nanny to all its citizens who has come up flat broke.
Reminds me of a president I know in the U.S.
#Rebelwithoutaclue -- Huh? That is the most illogical thing I've ever heard. Oh, wait... there was the one about education being snobbery. I guess that's even more illogical.
Iceland got caught up in the derivative and hedge fund markets/ when the banks got into trouble; they counted the face value of the assets, instead of the actual value( which was about 40% of face); American banks did the same thing, what saved American banks was the federal reserve printing over 16 trillion of new paper, which is still floating out there in the international banking community, it is going to be a hell of a awakening when redemption time comes.
Is this going to be the "standard" ?
And will the U.N. be leading the "World Court" for those Euro countries, et al ?
Sawyer - to not call Obama a true elitist Liberal who thinks his shiat doesn't stink is like stating Richard Milhous Nixon defended the U.S. Constitution......wait!
We have an elitist Ivy-leaguer who disregards the Constitution and a man who spent his life despising them and both embrace the disregard the Constitution. How....troubling.
You got the wrong guy, Rebel. The guy at the helm when all this went down was GW. Remember Dubia the Incoherent. Well, he doesn't have enough money to make up the difference but he could do some Jail Time. And, a lot of his cronies could be there with him.
GW Broke this country with his lies about "WMD in Iraq", and he had 4500 of our finest young people murdered on the battle field with his lies and antics (such as declaring VICTORY when it was only the beginning). And all because "They tried to kill my Daddy".
We should send everyone from the realtors to Bank CEO's to the President himself to the SLAM for ruining our country and the economy of much of the world for that.
Save your old tired BS Jay. The whole world, and all your favorite liberals in Congress who had the same access to Bush's info from the world's intelligence agencies, believed Saddam had WMD. Sadaam wanted all to believe it - especially Iran because he feared an attack from them. Your WMD assessment is so incredibly naive.
Send in, for instance, Fannie Mae and Freddie Mac (they are a very big morthahe banking/realtor in case you never heard of them) to the pres? Good call - considering they were one of Obama's biggest campaign donors in 2008. Must have been because he was Rep. Barney Fran's boss who said two weeks before Fannie and Freddie crashed and burned, from his seat as Chairman of theHouse Banking Committee, "they were rock solid and would be a good financial investment". LMAO you are a dope Jay.
Yeah, yeah, sure, Rebel. We've heard all this before. But what's this got to do with the Iceland PM's being on trial? If you want to make a parallel between the PM and the President, shouldn't you be talking about Dubya? He's the one who presided over the US collapse.
We should put Bush on trial next.
This is a sham and a shame. Iceland's problems were a direct result of the global domino effect from the mortgage mess.
The Icelandic governments' response was what I wish ours had been. They didn't bailout banks. That's why David Cameron accused Iceland of behaving illegally; a bunch of British investors and bankers lost money because the Icelandic government refused to bailout the banks. Bank accounts should not be guaranteed by the government. The Icelandic government, and ultimately the Icelandic taxpayers, should not be held responsible for risky banking or even just a loss of any capital.
If anything the bankers should be on trial but they're probably backing the politicians who are on a which hunt for someone to blame.
No Alias - agreed. The wrong people are being persecuted.
Whatever happened to the indictment of Goldman Sachs? Never heard anything further about it. Was that just a "pacifier" to temporarily appease the angry masses?
@No Alias Adam The Icelandic government was unable to bail out the banks since their losses were many times Iceland's GDP.
So would they have bailed out the banks had their GDP been higher?
I think the IMF would have loved to have owned that loan.
jail this republican for life
Hmmmm.....more Liberal grunting from 800# Gorilla.
It must really hurt to be treated like a commoner.
Wait, I see it now. His bankster friends are going to let him take the fall for them, get some slap on the back of the hand, and then they will take good care of him for life for "taking one for the team".
It's more likely that the bankers are backing his prosecutors. That's why they're not on trial as well.
Best decision to put him on trial. Sadly, USA business community prefer to reward golden parachutes instead like the ex-CEO of Occidental and other like him before. Is there any justice for folks who lost their fortune because of poor management, and financial vultures?